19473
VAT — yacht charterer — withdrawal of registration — whether Appellants carrying on business — on facts no — appeal dismissed
MANCHESTER TRIBUNAL CENTRE
SIMON JAMES MCDONALD & CHRISTINE MARY MCDONALD
Trading as S MCDONALD CHARTERS Appellant
- and -
THE COMMISSIONERS FOR
HER MAJESTY'S REVENUE AND CUSTOMS Respondents
Tribunal: David Demack (Chairman)
Howard J Middleton
Sitting in public in Manchester on 22 August 2005 and 10 January 2006
J D McDonald for the Appellant
J Cannan, counsel, instructed by the Acting Solicitor for HM Revenue and Customs for the Respondents
© CROWN COPYRIGHT 2006
DECISION
Berthing (3 months) 430.25
Insurance 162.50
Engine Service 111.00
Repairs 18.00
1141.00
(The statement contains no indication of whether those items of expenditure which were liable to VAT were tax inclusive or exclusive).
"1. 'Taxable person' shall mean any person who independently carries out in any place any economic activity specified in paragraph 2, whatever the purpose or results of that activity.
- The economic activities referred to in paragraph 1 shall comprise all activities of producers, traders and persons supplying services including mining and agricultural activities and activities of the professions. The exploitation of tangible or intangible property for the purpose of obtaining income therefrom on a continuing basis shall be considered an economic activity."
"(1) VAT shall be charged on any supply of goods or services made in the United Kingdom, where it is a taxable supply made by a taxable person in the course or furtherance of any business carried on by him.
(2) A taxable supply is a supply of goods or services made in the United Kingdom other than an exempt supply."
"In my opinion it will never be possible or desirable to define exhaustively "business" within the meaning of section 2(2)(b) [of the Finance Act 1972]. What one must do is to discover what are the activities of the taxable person in the course of which taxable supplies are made. If these activities are, as in this case, predominantly concerned with the making of taxable supplies to consumers for a consideration, it seems to me to require no straining of the language of section 2(2)(b) of the 1972 Act to enable one to conclude that the taxable person is in the "business" of making taxable supplies, and that the taxable supplies which he makes are supplies made in the course of carrying on that business …"
"I am moreover confident that Lord Cameron [the Lord President] did not intend to say that in all cases the absence of the purpose of gain is irrelevant to the issue whether the potential taxpayer is carrying on a business …
…
The primary meaning of all these words, "business, trade, profession and vocation", is an occupation by which a person earns a living. It is clear that all ordinary businesses, trades, professions and vocations can be carried on with differences from this standard and norm in regularity or seriousness of application, in the pursuit or disregard of profit or earnings, and in the use or neglect of ordinary commercial principles of organisation. As the decision in the Morrison's Academy case has shown, the absence of one common attribute of ordinary businesses, trades, professions or vocations, such as pursuit of profit or earnings, does not necessarily mean that the activity is not a business or trade etc if in other respects the activity is plainly a "business"."
(1) whether the activity was a serious undertaking earnestly pursued;
(2) whether it was an occupation or function actively pursued with recognizable or reasonable continuity;
(3) whether it had a degree of substance;
(4) whether it was conducted in a regular manner and on sound and recognized business principles;
(5) whether it was predominantly concerned with making taxable supplies for consideration; and
(6) such as consisted of taxable supplies of a kind commonly made by those who seek to profit by them.
DAVID DEMACK
CHAIRMAN
Release Date: 27 February 2006
MAN/05/0098